New Delhi: In the high-profile case involving the alleged misuse of algo-trading and co-location facility by some brokers, Sebi is believed to have found serious lapses on the part of NSE and several others including former and existing seniors executives, a preliminary probe suggests.

Besides, the capital markets regulator has issued fresh show-cause notices to the National Stock Exchange (NSE) and several of its former and current executives, senior officials said.

When asked, a spokesperson of the NSE declined to comment.

The Securities and Exchange Board of India (Sebi) has been probing the alleged lapses in high-frequency trading offered through the NSE's co-location facility. It was also investigating whether some brokers had unfair access to the exchange's co-location facility.

NSE's co-location facility allows low latency and fast execution to trading members. This setup of server gives a 10:1 speed advantage in comparison to other brokers.

In its preliminary probe, the markets watchdog has found serious lapses on the part of the exchange for allowing preferential access to select brokers, the regulatory officials said.

Also, it has found fault on part of several others including former and existing top executives of the exchange and related parties, they added.

As part of the probe, the regulator has recorded statements of several individuals.

Last month, Sebi chief Ajay Tyagi had said that the regulator had initiated enforcement action against several entities involved in the NSE's co-location issue.

"We have received the NSE investigation report in the co-location case... and have initiated enforcement actions," Tyagi had said.

Earlier in May, Central Bureau of Investigation (CBI) had registered an first information report (FIR) against a stock broker who allegedly manipulated the NSE system for two years to get first access to markets when they opened.

In March, the NSE said Sebi had returned its consent application in the case due to the ongoing investigation.